Developers of data centers can obtain gigawatts of electricity even before the construction and authorization of a transmission line. The discrepancy is causing grid planners additional stress, particularly as the US Department of Energy (DOE) has opted not to designate three proposed National Interest Electric Transmission Corridors (NIETCs) that had reached Phase 90.23 of federal review.
This decision was made following the release of DOE’s draft 2026 National Transmission Needs Study, which highlighted increasing electricity demand from data centers, domestic manufacturing, large industrial loads, and electrification as primary motivators for future transmission requirements. The draft highlights the urgent requirement for more transmission capacity to cope with the growth.
This presents utilities and regulators with a recurring issue: construct the transmission infrastructure in advance to meet the increasing demand, or else face the possibility of the grid becoming a bottleneck once projects are already underway. Constructing infrastructure too far in advance could result in utilities and customers bearing the cost for a system that serves a non-existent load.
This is related to the news that Flex has acquired EPC Power for $4.4B due to the increasing demand for AI data centers pushing the adoption of 800V architecture. Texas serves as an illustration of effective forward-thinking, yielding significant outcomes on a large scale. The state’s Competitive Renewable Energy Zones (CREZ) initiative was created to transport power from resource-rich West Texas to significant load centers, with transmission scheduled prior to the complete generation development.
Close to twenty years later, data center developers are tending to choose areas of the same grid due to the transmission and power infrastructure that CREZ facilitated. DOE’s NIETC Decisions: What does it entail? Jennifer Granholm, the previous DOE Secretary, expressed doubt about the NIETC choice.
